Home-owner budgeting: How to balance out rising home loans by switching your home insurance policy
After the Reserve Bank of Australia’s decision to hike rates by 0.25% on Tuesday, the cost of being a home-owner in Australia is likely to rise for many, leading to a potential uptick in cases of serious financial stress for those with a mortgage.
The Big Four banks have already indicated how they’ll respond to the RBA’s decision, with ANZ and NAB confirming increases effective as early as 13 May, 2022. It’s expected that more rate rises will follow, too.
So, if you’re one of the nearly 80% of Australians with a Big Four bank home loan, you might be frantically searching for a way to save money to meet the servicing needs of your loan.
One way could be to compare your home insurance policy to see if you can save on your home-owner costs.
You could save money on your home insurance to put towards your mortgage repayments.
The first step might be to work out how much your home loan repayments are going to change. Mozo’s rate change calculator can help determine how your monthly repayments will rise with a new interest rate.
Loan details
Repayment change if rates go up
Then you’ll want to work out how your monthly repayment increase compares to the amount you’re spending on your home insurance.
For example, say you’ve got $500,000 left to pay off on your 3% variable home loan and have 25 years left on your loan term. If your lender has made the decision to pass on a 0.25% rate increase on your standard variable home loan, your monthly repayment will increase from $2,371 to $2,437 - that’s a difference of $66, which over the long-term becomes a significant chunk of extra expenses.
See how rates are moving with Mozo’s rate change tracker. Now with this extra cost established, you can compare home insurance policies to maybe find an opportunity to cut back your overall expenses.
Compare home insurance policies
By comparing home insurance policies, you could potentially find a better option, switch and ultimately save on your home insurance.
Alternatively, there are a few things which you might be able to do to reduce your overall home insurance cost in both the short and long terms.
Six tips to save on your home insurance
- Increase your excess to reduce your home insurance premiums. While this might reduce the cost of your insurance premium in the short-term, making a claim on your policy will end up being more expensive. So, there’s a degree of risk here.
- Buy your policy online and you might be able to save on your home insurance with providers that offer such incentives.
- Multi-policy discounts may be available through some providers. So if you need home insurance and a car insurance policy as well, you might be able to switch and save by buying more than one policy with the same provider.
- Increase your home security and your premium may drop, as the providers will see your home as less likely to be broken into. Providers ask about security features like burglar alarms, security screens, and the types of locks you have on your doors when working out your premium. So, if you haven’t already bolstered your home security, then it might be worth doing (for more than one reason).
- Pay your premiums annually and some providers might give you a discount. It’s almost like a loyalty bonus, where you commit to a year on the one policy. But beware, different providers have different policies on cancellations.
- Only buy the extras you need and you might be able to save lots by trimming the fat on your policy. A leaner policy, filled only with what you think you’ll actually require, could reduce the cost of your premium significantly.
Check out some of the home insurance providers Mozo has in its database below, or check out the best home insurance policies for 2022.
Compare home insurance - rates updated daily
Home Insurance
- Main events covered
- Fire
- Theft
- Storm
- Flood
- Monthly payments
cost extra - No
- Underinsurance protection
- No
- New for old
replacement - Yes
- General contents
- No
- Cash
- No
- Cd dvd and electronic files
- No
- Computer software hardware
- No
- Camera and accessories
- No
- Carpets
- No
- Antiques and valuables
- No
- Jewellery
- No
- Replacement of documents
- No
- Tools of trade
- No
- Contents while moving
- No
- Lock replacement
- Up to $1,000
- Temporary accommodation
- Up to 12 months, up to 10% of sum insured
- Debris removal
- Up to 20% of sum insured combined with demolition cost
- Demolition cost
- Up to 20% of sum insured combined with debris removal cost
- Accidental loss and damage
- Optional Extra
- Accidental breakage of glass
- Yes
- Lightning
- Yes
- Earthquake
- Yes
- Storm surge
- Yes
- Buildings and structural improvements
- Yes
- Building materials
- No
- Landscaping
- Up to $1,000 for plants
- Gates and fences
- Yes - Up to 50% of the total cost, up to 2km
Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
Read our Mozo Review to learn more about honey Home Insurance
Home Cover - Buildings
- Main events covered
- Fire
- Theft
- Storm
- Flood
- Monthly payments
cost extra - Yes
- Underinsurance protection
- Optional ExtraUp To 30% Of Buildings Sum Insured, Applied Automatically For Eligible Policies
- New for old
replacement - Yes
- General contents
- No
- Cash
- No
- Cd dvd and electronic files
- No
- Computer software hardware
- No
- Camera and accessories
- No
- Carpets
- No
- Antiques and valuables
- No
- Jewellery
- No
- Replacement of documents
- No
- Tools of trade
- No
- Contents while moving
- No
- Lock replacement
- Up to $2,500
- Temporary accommodation
- Up to 24 months, up to 20% of sum insured combined with temporary accommodation for pets
- Debris removal
- Yes, combined with building costs
- Demolition cost
- Yes, combined with building costs
- Accidental loss and damage
- Optional Extra
- Accidental breakage of glass
- Yes
- Lightning
- Yes
- Earthquake
- Yes
- Storm surge
- Yes
- Buildings and structural improvements
- Yes
- Building materials
- Up to $2,000
- Landscaping
- No
- Gates and fences
- Yes
Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
Read our Mozo Review to learn more about QBE Home Cover - Buildings
Home Insurance
- Main events covered
- Fire
- Theft
- Storm
- Flood
- Monthly payments
cost extra - Yes
- Underinsurance protection
- No
- New for old
replacement - Yes
- General contents
- No
- Cash
- No
- Cd dvd and electronic files
- No
- Computer software hardware
- No
- Camera and accessories
- No
- Carpets
- No
- Antiques and valuables
- No
- Jewellery
- No
- Replacement of documents
- No
- Tools of trade
- No
- Contents while moving
- No
- Lock replacement
- Up to $1,000
- Temporary accommodation
- Up to 12 months, up to 12% of sum insured
- Debris removal
- Up to 20% of sum insured combined with demolition and professional fee costs.
- Demolition cost
- Up to 20% of sum insured combined with debris removal and professional fee costs
- Accidental loss and damage
- Optional Extra
- Accidental breakage of glass
- Yes
- Lightning
- Yes
- Earthquake
- Yes
- Storm surge
- No
- Buildings and structural improvements
- Yes
- Building materials
- Up to $1,000
- Landscaping
- No
- Gates and fences
- Yes
Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
Read our Mozo Review to learn more about Youi Home Insurance
Home Insurance
- Main events covered
- Fire
- Theft
- Storm
- FloodOptional Extra
- Monthly payments
cost extra - Yes
- Underinsurance protection
- Optional ExtraUp To 25% Of Building Sum Insured
- New for old
replacement - Yes
- General contents
- No
- Cash
- No
- Cd dvd and electronic files
- No
- Computer software hardware
- No
- Camera and accessories
- No
- Carpets
- No
- Antiques and valuables
- No
- Jewellery
- No
- Replacement of documents
- No
- Tools of trade
- No
- Contents while moving
- No
- Lock replacement
- No
- Temporary accommodation
- Up to 10% of sum insured, up to 12 months. Combined with temporary accommodation for pets.
- Debris removal
- Up to 10% of sum insured combined with demolition cost
- Demolition cost
- Up to 10% of sum insured combined with debris removal cost
- Accidental loss and damage
- Optional Extra
- Accidental breakage of glass
- Yes
- Lightning
- Yes
- Earthquake
- Yes
- Storm surge
- No
- Buildings and structural improvements
- Yes
- Building materials
- Up to $1,000
- Landscaping
- No
- Gates and fences
- Yes
Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
Read our Mozo Review to learn more about Virgin Money Home Insurance
Home Insurance
- Main events covered
- Fire
- Theft
- Storm
- Flood
- Monthly payments
cost extra - Yes
- Underinsurance protection
- Optional ExtraUp To 30% Of Building Sum Insured
- New for old
replacement - Yes
- General contents
- No
- Cash
- No
- Cd dvd and electronic files
- Up to $1,000
- Computer software hardware
- Up to $1,000
- Camera and accessories
- No
- Carpets
- Yes
- Antiques and valuables
- No
- Jewellery
- No
- Replacement of documents
- No
- Tools of trade
- No
- Contents while moving
- No
- Lock replacement
- Up to $2,500
- Temporary accommodation
- Up to 24 months, up to 20% of sum insured combined with temporary accommodation for pets
- Debris removal
- Yes
- Demolition cost
- Yes
- Accidental loss and damage
- Optional Extra
- Accidental breakage of glass
- Yes
- Lightning
- Yes
- Earthquake
- Yes
- Storm surge
- Yes
- Buildings and structural improvements
- Yes
- Building materials
- Up to $2,000
- Landscaping
- Yes - pathways
- Gates and fences
- Yes
Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
Read our Mozo Review to learn more about Australia Post Home Insurance
* Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
^See information about the Mozo Experts Choice Home Insurance Awards